By Stefano Rebaudo
MILAN Nov 26 Any offer for Telecom Italia
from Egyptian businessman Naguib Sawiris, who has said
he wants a stake, must value the group at more than twice its
market price or be rejected, its third-biggest shareholder said
Debt-laden Telecom Italia, which is considering a possible
bid for Vivendi's Brazilian unit GVT as part of a
strategy review, has attracted the attention of Sawiris, who
could invest billions of euros in the company by taking new
"A correct price would be the one that most shareholders
have on their books, which is around 1.5 euros per share," Marco
Fossati, whose family's Findim Group SA owns 5 percent of
Telecom Italia, told Reuters.
At 1402 GMT, Telecom Italia shares were trading at 0.695
euros, down 0.9 percent, underperforming the European telecom
sector index, which was down 0.4 percent.
It is not clear how big an investment Sawiris wants to make,
but media reports have suggested a range of 2 billion to 5
billion euros ($2.6-6.5 billion), a rare cash-raising
opportunity for a group caught for years between the need to pay
dividends and keep its investment grade rating.
A 3-billion-euro cash call priced at 1.5 euros per share
would make Sawiris the largest single investor in the Italian
group, with a stake of nearly 13 percent after the capital hike,
ahead of Spain's Telefonica, which has an indirect
stake of around 10 percent.
"The operation must be carried out at a right price and must
create value. In the absence of these elements, I think it would
be in the interest of all shareholders to let the offer decay,"
Telecom Italia is controlled by Telco, a holding company
owned by Telefonica and a group of three Italian financial
institutions. Telco has 22.4 percent of the former monopoly.
Analysts said a capital increase priced below 1.5 euros
would be too dilutive for existing shareholders and would force
Telco investors to further write down their stakes.
"I seem to have understood there is no specific or detailed
offer ... We're waiting for his next move," said Fossati.
The possible investment of Sawiris will be discussed at a
Telecom Italia board meeting on Dec. 6 along with other key
strategy issues such as the GVT bid and the possible sale of a
stake in the group's Italian fixed-line network.